PUP and TWSS taxes
Revenue explains how PUP and TWSS taxes owed will be paid back by Irish workers
Taxes were not taken in real-time when the emergency payments were introduced.
Details of how workers will pay back taxes and USC owed through the Temporary Wage Subsidy Scheme and the Pandemic Unemployment Payment have been revealed by Revenue.
Workers who do not decide to pay all or some of the tax owed will automatically have their tax credits reduced for four years beginning in January 2022.
The decision to collect the tax over four years from 2022 has been made to reduce hardship on those affected.
The TWSS and PUP were quickly introduced by the Government in response to the financial crisis that emerged as the coronavirus pandemic gripped the world.
As a result, tax and USC was not taken in real-time payments like normal, but instead are owed at the end of the year.
Revenue spokesman Declan Rigney explained: “In January 2021, Revenue will make a Preliminary End of Year Statement available to all employees, including those who were in receipt of the TWSS or PUP. The Preliminary End of Year Statement will include pre-populated information showing the amount of TWSS and/or PUP payments, if any, received by the employee concerned according to Revenue records. The statement will also provide employees with a preliminary calculation of their income tax and USC position for 2020 and will indicate whether their tax position is balanced, underpaid or overpaid for the year.
When the Preliminary End of Year Statement is available, employees will have an opportunity to update their personal record, declare any additional income and claim additional tax credits due, such as qualifying health expenses, via myAccount, to arrive at their final liability for 2020.”
He continued: “Employees will be given the opportunity to fully or partially pay any income tax and USC liability through the Payments/Repayments facility in myAccount. Otherwise, Revenue will collect the liability, interest free, by reducing the employees tax credits over 4 years to minimise any hardship. The reduction of tax credits will start in January 2022.”